Welcome to the companion blog to the "America's Evil Genius" political webcast series. In this space, I'll supplement my weekly video blogs with timely opinion and analysis on current issues, both large and small. Think of this as "extra credit" delivered by one of the great political professors of modern times!



You can view the "America's Evil Genius" web series at: www.youtube.com/americasevilgenius





Wednesday, June 20, 2012

Dispelling Obama's Lies on the Bush Economic Policy

In the midst of his re-election campaign, Barack Obama has resorted to telling bold-faced lies to the American people. Namely, he has characterized the economic policies of George W. Bush as “failures” in nearly every speech he has recently made. But a quick look at the facts indicates that Bush’s economic policies weren’t “failures”, but were instead quite successful…and that those policies certainly did not create the current financial mess.

In order to analyze the success (or failure) of Bush’s economic policies, we must first take stock of the environment with which he was working. In 2001, Bush was not only dealing with the burst of the dot com bubble, but also was dealing with the after-effects of the most heinous attack on American soil in our history. Life in America had virtually grinded to a halt—and understandably so—on September 11, 2001…the day that the entire world changed. And our economic habits were a part of that re-assessment of our surroundings, just as everything else was. So there’s no doubt, Bush was dealing with an economy that was dangling on the precipice to begin with.

Bush’s primary maneuver to answer this most gargantuan of economic challenges was the (now much-vilified) “Bush Tax Cuts”. And while it’s difficult to trace an upturn or downturn in an economy to any one factor, the fact remains that nearly six million jobs were created between 2001 and 2008 (or perhaps even more jobs were created, depending upon who’s estimates you believe. Stats, BTW, come from the National Bureau of Labor Statistics, as re-printed in the Tampa Bay Times: http://www.politifact.com/truth-o-meter/statements/2011/may/11/john-boehner/john-boehner-says-bush-tax-cuts-created-8-million-/ ). Furthermore, tax revenue increased after the tax cuts (just as it normally does when taxes are cut…that’s the pesky little economic fact that Liberals don’t want you to know!) Between 2003 & 2007, tax filers grew by 9.6%, and taxable income grew by 44% (Source: http://www.heritage.org/research/reports/2011/09/setting-the-tax-record-straight-clinton-hikes-slowed-growth-bush-cuts-promoted-recovery )

Critics often say that many of the jobs created during the Bush years were later “lost” in the 2008 recession. But it doesn’t take away from the fact that these jobs were created in the first place. Economic conditions and environments change over time, and no job is guaranteed to exist 10 or 20 years down the road—no matter what economic or political philosophies shape the environment in which the job was originally created. I’d be willing to bet that if, today, you walked up to an unemployed man who is presently struggling to feed his family and offered him a job—but with the caveat that “I can’t guarantee that the job will still be around ten years from now”, that man would eagerly take the job (and likely give you a heartfelt “Thank You” on top of it). Created jobs don’t suddenly lose their legitimacy simply because they may not survive different and unforeseen economic circumstances down the road. The bottom line is that Bush’s tax cuts were a significant factor in the economic environment of the early 2000’s—and that was an environment in which jobs were created. Seems like the definition of “successful economic policy” to me…

But what about the housing bubble and the ensuing financial crisis…that just had to be all Bush’s fault, didn’t it? After all, it happened during his term, so it must have been his fault, right? Why, you’re probably saying to yourself, if he’d just reigned in Wall Street, none of this icky recession stuff would have ever happened!

You couldn’t be more wrong.

It wasn’t George W. Bush—or even Wall Street for that matter—who caused bad loans to be made or unreasonable risks to be taken by the banking industry. Instead, it was the government itself that injected this undue risk into the system—via the Community Re-Investment Act that was implemented back in the late 1970’s. It was this law, followed by continual pressure from the Federal Government, which forced banks to lend to home “owners” who had heretofore been kept out of the housing market (and kept out of it for good reason).

Prior to this act, most banks had far more strict lending standards. Back in the 1970’s and earlier, it wasn’t out of the ordinary to see banks demand down payments of 20% or even more on a home loan, or to charge interest rates in the double-digits. While lending standards and conditions like these certainly make it more difficult for individuals to purchase homes, they also functioned as a roadblock to keep the riskiest investors out of the marketplace entirely—thereby reducing the risk for large-scale disaster. But government involvement in housing brought with it lower interest rates, lower down payment demands, and insistence on much looser and unreasonable lending standards (including the outlawing of the legitimate lending practice of “redlining”—the act of prohibiting home loans to certain zip codes in which homes are statistically unlikely to retain their value). All of this in an effort to attract the worst possible customers into the marketplace. Since banks were no longer allowed to make good investment decisions, they had to do the next best thing—find a way to sell the risk (which the government had forced them to take on in the first place) to some other sucker…er…”investor”…in order to glean some value out of it and mitigate this risk.

And all of these dominoes started falling long before Bush (or even before his father) ever took office. It wasn’t a lack of Wall Street regulation and banking regulation that caused these problems…it was instead the over-regulation of the housing industry which brought upon this financial disaster.

George W. Bush was far from a perfect President. There are many things that even the most ardent Conservatives and Republicans can find to disagree with him on (His gratuitous spending on education, “No Child Left Behind”, dumping money into AIDS prevention in Africa without getting anything in return, Medicare Part D, and a myriad of other issues). But to look at his economic policies and consider them to be failures is to completely ignore the facts and history of the 2000’s. The Bush Tax Cuts did not destroy jobs, and Bush’s economic policies did not cause the housing crisis. And while we’re on the topic, here’s another Liberal charge that we can debunk: “Charging two wars on our Credit Cards” didn’t play any kind of significant role in creating our massive debt. At the height of our military action—2006—Military spending and educational spending combined were less than 20% of our total budget. Entitlement programs (Social Security, Medicare, and the like) were nearly 2/3 of our overall budget! Blaming our horrendous debt on our wars and military action is like a 350 pound woman saying “this dress makes me look fat”. Honey, it ain’t the dress that makes you look fat…it’s the fat that makes you look fat. It ain’t the wars that have made us broke…it’s the Social Security, Medicare, & Medicade that have made us go broke, and that we’re constantly borrowing money to fund!

So whenever you hear Obama talk about the “failed economic policies” of the last administration, recognize that your President is lying to you. It would be bad enough if Barack Obama were simply an incompetent buffoon who was in over his head—he’d have to be replaced, but you couldn’t really get mad at him for his stupidity. But he’s lying to you on top of simply being incompetent, and the media is backing him up. And lying to the American people—when the facts to the contrary are as obvious as a Hollywood starlet’s boob job—shows not only a severe lack of character, but it calls into question one’s motivations, patriotism, and dedication to American principals as well!

No comments:

Post a Comment